Business Standard

Volume IconACMA's Sunjay Kapur on auto-component sector's preparedness for EV shift

In a chat with Business Standard's Surajeet Das Gupta, president of Automotive Component Manufacturers Association of India, Sunjay Kapur, shares the industry's preparation to meet demand from EVs.

ImageSurajeet Das Gupta New Delhi
Sanjay, sanjay kapur, sona koyo

Sanjay Kapur

Q1: You know, obviously there is going to be, and it started already, a clear shift towards electric vehicles. The industry has to get prepared, and they are already preparing in many ways. So this change that you see, which will happen, what is the kind of roadmap that you have in the next five years?   

Click here to connect with us on WhatsApp

>Adoption of EVs – driven by regulation and customer demand – is increasing everyday
>Two and three-wheeler industry is transitioning from internal combustion engine (ICE) vehicles to electric vehicles (EVs) faster  
>From supply perspective, EVs have opened up a new market segment for companies 
>Around 60% of Automotive Component Manufacturers Association of India (ACMA) members are ready to supply to EVs. The rest will be prepared by 2023
>75 companies eligible for the auto components production-linked incentive (PLI) scheme have to invest Rs 250 crore each in five years to get the incentive, and most of this investment will go into supply to EVs
>To justify the investment, the auto components companies in India will have to explore the global market 

Q2 What is the rough number for investment for next five years you (ACMA members) are looking at? 
>Auto components companies will have to make a minimum investment of Rs 18,600 crore in five years to build future technologies in the automobile industry
>Market opportunities for EVs exist in the US and Europe
>Bulk of the investment will be used for EVs, some will go towards building technology that is currently imported

Q3: What is the size do you think the Indian market would be in about 3-5 years down the line? 
>Indian auto components sector is the fourth largest in the world and likely to cross $5 million
>Exports of Indian auto components industry grew 76% last year
>The industry would benefit from China+1 strategy and global tech giants looking at India for production 
>Business would come to India because of superior technology and not because of cost-efficiency alone

Q4: You have to look at a global market for electric vehicle components. Are there areas where we have the strength where we could be the export hub to the world? 
>R&D spend increasing in technologies around steering, drivetrain, motors etc 
>The choke point in auto components is electronics. It calls for heavy investment 
>Need alliance between automotive and electronics industry to explore building auto-electronics in India and reduce dependence on imports

Q5: Is ACMA trying to do something on that front? 
>ACMA is working in collaboration of IIT Delhi (Sonipat campus) and IIT Bombay on electrification of vehicles  
>Working with member companies to help them move towards electrification
>In conversation with electronics industry to explore localisation of electronics in India
>A scalable market is essential for investment in auto-electrification and future tech

Q6: Do you see this whole move, within the next five six years, auto components will turn to global company, with something like Bosch coming from India?
>Aims to build the next Bosch from India 
>It needs continued investment in technology and talents, and work towards building products that are future ready
>Companies like Bosch are successful because of their innovations
>Average R&D spends of auto components industry is 0.5%. -This needs to be more than 3% 
>Investments will depend on the opportunity coming to auto component companies 

Q7: A lot of companies are also looking at acquisitions from the point of view of acquiring R&D which already exists. It’s not just creating a manufacturing…  
>Telematics, connectivity, software, KPIT etc are changing the competitive landscape of the auto component space 
>ACMA member companies are working with (and often incubating) startups on future technologies.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 30 2022 | 7:00 AM IST

Explore News